GovGuam still short $10 million in its promised funding

The University of Guam has been facing funding issues at the tail-end of Fiscal Year 2016.  It now finds itself without Government of Guam funding for the FY 2017.

According to UOG President Robert Underwood, “The University of Guam operates on a budget of about $90 million dollars a year.”

Of the $90 million spent by the University, $60 million is accrued by the University itself through things such as grants and tuition; and the remaining $30 million is a cash allotment from the Government of Guam.

The money raised by tuition and grants cover the remaining operational costs of the University, as well as the extra services that are provided.

The $60 million raised by the University also goes to improving the infrastructure of the campus, and keeping the campus up-to-date with new technological demands.

Cash allotments for the University have been provided by the Government of Guam since 1952, and are generally used for the payment of permanent employees and to cover the cost of utilities for the campus.

According to Underwood, “The amount of money allotted for the University has remained about the same since the 90’s.”

To date, the Government of Guam still owes the University approx. $10 million. According to Underwood, this time last year, the Government only owed the University approx. $2.7 million. 

The Department of Administration is chipping away at the $10 million dollar shortage, at a rate of about $500,000 every Friday. At the current rate, DOA will not be able to finish paying the money owed for FY 2016 until about April 2017.

Due to the delay of funds promised by the government, the University of Guam is now dipping into its reserve funds.

“At the rate of spending, the University will deplete its reserve funds by January,” Underwood said.

Underwood, however, reassures students that the University will continue to function despite the cash crunch.

“It will simply mean that the funds that were planned to be used for upgrades and improvements will be displaced to ensure the University keeps running,” Underwood said.

The University is already beginning to feel the effects of the cash shortage in its relationship with its vendors. Instead of the usual three-month waiting period for vendors to receive money, they now are faced with a six-month waiting period. 

In order to counter the cash allotment shortage, the University may potentially have to entertain some cutbacks.

The cutbacks could include the elimination of some of the University’s programs, and a possible rise in tuition costs.